Indianapolis’s Transit Investment is Starting to Pay Off

The city of Indianapolis is learning that beefed-up transit service quickly translates to more riders — with local transit agency IndyGo reporting this week that ridership was up 3.4 percent this August compared to the previous year.

The mini-surge comes after service was expanded in February and June by about 500 more weekly bus trips — a direct result of a 2016 county income tax hike of 0.25 percent that raised money for the system, Bryan Luellen, a spokesman, told Streetsblog.

Prior to the levy passing, Indianapolis operated a bare-bones system, with just 35,000 trips a day — near the bottom among peer cities. The tax provided funding that will eventually expand service by about 70 percent, including a 35-mile bus rapid transit line, the Red Line, in summer 2019.

At the same time, IndyGo says it will unveil a complete bus system redesign that will create a network of simple bus routes with frequent service in the densest urban corridors. The goal is to connect 65 percent of Marion County residents — and 85 percent of those living in poverty — to more frequent transit.

Eventually, Indianapolis hopes that ridership will increase at least in proportion with service increases — 70 percent. But Luellen says the fact that bus ridership has already ticked up in Indy is good news.

“We’re just now starting to see some behavior change from these frequency improvements,” he says.

Ah, of course! With a population of 860,000, that would mean that nearly everyone was riding a bus, unless the vast majority of runs are nearly empty! 35,000 daily ridership sounds more plausible (and dismal).

Indianapolis-Marion County are allowed to collect income and property tax. They are not permitted to collect sales tax (all sales tax is collected by the state and the effective county sales tax rate for all of Indiana is 0%).

Marion County does actually have 2% in addition to the state on prepared food and beverage. That goes to the Capital Improvement Board. There are also a variety of hotel and rental car taxes that usually go to the CIB too. The CIB is in charge of running Lucas Oil Stadium, the Convention Center, and Bankers Life Fieldhouse.

As to the income tax, essentially the state has to authorize it first and then the county can impose it. This specific transit tax had to pass the state legislature, signed by the Governor, voted on by the local council, pass a referendum, face another vote on the local council and then the mayor’s signature.

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